October 01, 2018
2 min read

Bill to restrict dialysis clinic profits, third-party payments for patients vetoed by California governor

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California Governor Edmund G. “Jerry” Brown Jr. has vetoed legislation that would have restricted dialysis provider profits and limited organizations like the American Kidney Fund from paying the premiums of patients receiving dialysis treatments.

In a letter sent to the state Senate on Sept. 30, Brown said S.B. 1156 “attempts to prohibit the questionable practice of financially interested entities providing premium assistance payments to patients for the purpose of obtaining higher fees for medical services. I believe, however, that this bill goes too far as it would permit health plans and insurers to refuse premium assistance payments and to choose which patients they will cover. I encourage all stakeholders to continue to work together to find a more narrowly tailored solution that ensures patients’ access to coverage,” he wrote. Brown had until Sunday to act on S.B. 1156 and a host of other bills approved by the House and Senate.

The bill was originally introduced on Feb. 14 by Sen. Connie Leyva, D-Chino, to limit third-party payers from covering insurance premiums for patients on dialysis and for patients entering drug rehabilitation. Since then, the bill had been amended four times and a cap on profits for dialysis providers operating in the state was added. Under that addition, dialysis providers would be reimbursed at Medicare rates for patients who chose a commercial health plan and who chose to receive assistance from the AKF in paying their premiums.

Health plans operating in the state were in favor of the legislation, saying that the availability of third-party payers covering premiums for patients were helping dialysis providers “steer” dialysis patients away from Medicare and into commercial health plans so they can charge higher rates for dialysis care.

In a statement emailed to Healio/Nephrology, Javier Rodriguez, CEO for DaVita Kidney Care, said, “We are deeply relieved and want to thank Governor Brown for protecting dialysis patients and vetoing S.B. 1156, a bill that would have significantly hurt dialysis patients throughout the state. This bill was sponsored and pushed by the [Service Employees International Union] SEIU and Blue Shield of California and would have harmed thousands of dialysis patients in California by allowing health plans to discriminate against low-income dialysis patients who rely on charitable assistance to pay their insurance premiums.”

LaVarne A. Burton, president and CEO of the AKF, said in a statement, “By vetoing S.B. 1156 — which was introduced and passed through the legislature at the behest of health insurers and the SEIU —the governor allows the state’s kidney failure patients to continue receiving AKF’s support to stay insured.”


She added, “AKF will continue to advocate for dialysis and transplant patients and against similar legislation or policy anywhere in the United States that targets chronically ill people living with kidney failure.”

The dialysis provider community has donated funds to the AKF’s Health Insurance Premium Program (HIPP) since 1997 to help cover premiums for patients who could not afford them. Dialysis providers cannot pay patients directly to cover their premiums; the AKF created HIPP to serve as a link between patients and providers.

California residents will be voting on a ballot initiative in November that also restricts dialysis clinic profits. That measure restricts dialysis providers to 115% of the cost of direct patient care. – by Mark E. Neumann


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